How to Drive Oil to $200

On last night's Kudlow & Co., I discussed how absurd US energy policy is.

The United States is heavily dependent on fossil fuels (>80%), most of which come from places we would rather not send our money to. We consume 26% of the world's energy, with only 3% of the world’s known oil reserves.

It turns out that for the past 3 decades, we've had a George Costanza Energy policy -- every decision we have made as a country has worked to drive energy prices higher. Had we made the opposite decisions (see embedded YouTube clip above), crude oil prices would be much lower than they are today ($130.17 as I type this).

What follows is a list of energy-related policies of the United States. On many of these, I have no opinion -- but I wanted to list as many as I could to demonstrate why oil is where it is

US Policies with an impact on Energy:

Limit areas available for offshore drilling;

Stopped the planned rise of CAFE standards for automobiles;

Restricted nuclear power generation of electrical;

Federal Reserve policies since 2001 led to a very weak US dollar (raising oil prices);

Energy conservation policies? None;

Provided little or no incentives for hybrid automobiles;

No major US R&D research on energy;

Game changing breakthroughs over the past decades in solar, battery, or energy generation technologies? None;

Some of the above is being responded to by the private sector. With oil at $130+, there are significant price incentives for these technologies.

However, markets develop solutions only after the economics of it are feasible. This means we are starting R&D with oil at previously unthinkable levels. Imagine if we had some form of energy leadership 10 or 20 years ago when oil was $8.

What other policies does the US have that has led to higher Oil prices?

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